It’s bad enough when you have to leave your home and family to go fight in a war. It’s even worse when that makes you a target not just for enemy fire, but also for American scammers. Cheating the troops is a profitable industry, since they are often distracted by duty, economic circumstances, and inexperience. The newsworthy story is not that servicemen are scammed, but that one of these businesses was punished.
Military bases are magnets for shady businesses that pop up like mushrooms in the towns that surround the installations. Along with the usual entertainment establishments of ill repute come the used car dealerships and payday lenders that make their living from cheating the troops. One sleazy practice for used car dealerships in the North Carolina and Virginia was to distribute business cards around the various military bases in the area, providing a phone number for an agent named “Kim.” Fresh recruits would cycle into the area, and call dealerships asking for Kim, which was eventually revealed as an acronym for Kids In Military, a signal that they could be easily talked into bad deals. Other tricks include paying shills, including other soldiers, to lure marks into dealerships and turn on the pressure, with lies like “You have to buy this car now, to get back to your base in time to avoid being AWOL!”
Payday lenders are popular since many recruits have poor credit ratings or insufficient credit history to obtain more legitimate loans, and it’s not inconceivable that some of their financial problems are due to having first been scammed by someone else. USA Discounters, a predatory chain that also conducted business under the names USA Living and Fletcher’s Jewelers, opened stores outside many military bases and sold overpriced merchandise with allegedly usurious terms. Although the chain declared bankruptcy after closing in 2015, many servicemen had signed contracts that obligated them to keep paying even after the chain went out of business.
USA Discounters recently settled with 49 states (excluding Colorado, which had previously settled) and will provide restitution including debt write-offs, crediting $100 to accounts opened after June 12, 2012, and fixing customers’ negative credit reports.
Getting over their heads in debt can cause problems with military personnel getting or keeping a security clearance, so unscrupulous businesses who profit from cheating the troops are a national security issue. Many such businesses are listed as no-go areas for people in the military, as part of a way to “protect the health, welfare, and safety of all personnel.” Troops found patronizing these businesses are subject to disciplinary measures. Lists of no-go businesses can be found for several forts. However, it is an open question as to why USA Discounters or their various DBAs did not appear on any such lists that the author could reasonably find. Lists are also often outdated and slow to change, while profit incentivizes scumbag businesses to be nimble and adept at changing their identities in order to keep cheating the troops.
One bright spot is some legislation just coming into effect that will cap interest rates for many loans at 36%, including fees. Although 36% is still onerous, it prevents rates in the 300-400% range that were not uncommon. Of course, lending institutions that cater to servicemembers are complaining bitterly about this Big Government assault on the free market, saying they will be forced to dispose of several types of financial instruments. Frankly, I think that’s the point.
Since our men and women in uniform offer to put themselves between us and danger, the least we could do is protect them from deceptive dealers and sleazy lenders who make a practice of cheating the troops. Hucksters like that offer very little value to society, and a war on their niche is a fight I could get behind.